Forecasting Sponsorship Costs: Marketing Intelligence in the Athletic Apparel Industry

Special Issue on “The Dynamics of Sports Marketing and Management" in Marketing Intelligence and Planning, Forthcoming.

31 Pages Posted: 4 Mar 2015

See all articles by Jonathan A. Jensen

Jonathan A. Jensen

University of North Carolina at Chapel Hill

Lane Wakefield

Texas A&M University

Joe Cobbs

Northern Kentucky University - College of Business

Brian Turner

Ohio State University (OSU)

Date Written: February 20, 2015

Abstract

Purpose – Due in large part to the proprietary nature of costs, there is a dearth of academic literature investigating the factors influencing the costs for sport marketing investments, such as sponsorship. Therefore, the purpose of this study is to provide an analytical framework for market intelligence that enables managers to better predict and forecast costs in today’s ever-changing sport marketing environment.

Design/Methodology/Approach – Given the dynamic and ultra-competitive nature of the athletic apparel industry, this context was chosen to investigate the influence of four distinct factors on sponsorship costs, including property-specific factors, on-field performance, and market-specific factors. A systematic, hierarchical procedure was utilized in the development of a predictive empirical model, which was then utilized to generate predicted values on a per property basis.

Findings – Results demonstrated that both property-specific and performance-related factors were significant predictors of costs, while variables reflecting the attractiveness of the property’s home market were non-significant. Further analysis revealed the potential for agency conflicts in the allocation of resources towards properties near the corporate headquarters of sponsors, as well as evidence of overspending by challenger brands (Adidas, Under Armour) in their quest to topple industry leader Nike.

Originality/Value – Though the context of apparel sponsorships of U.S.-based intercollegiate athletic programs limits the generalizability of the results, this study represents one of the few in the literature to empirically investigate the determinants of sponsorship costs, providing much-needed guidance to aid decision-making in a highly volatile, unpredictable industry.

Keywords: Marketing Intelligence, Sponsorship, Costs, Forecasting, Agency Conflicts, Athletic Apparel Industry

JEL Classification: C53, M31, M37

Suggested Citation

Jensen, Jonathan and Wakefield, Lane and Cobbs, Joe and Turner, Brian, Forecasting Sponsorship Costs: Marketing Intelligence in the Athletic Apparel Industry (February 20, 2015). Special Issue on “The Dynamics of Sports Marketing and Management" in Marketing Intelligence and Planning, Forthcoming. . Available at SSRN: https://ssrn.com/abstract=2571940

Jonathan Jensen (Contact Author)

University of North Carolina at Chapel Hill ( email )

308 Woollen
Chapel Hill, NC 27599
United States

Lane Wakefield

Texas A&M University ( email )

804 Harrington Tower
Texas A&M University
College Station, TX 77843
United States

Joe Cobbs

Northern Kentucky University - College of Business ( email )

Highland Heights, KY 41099
United States

Brian Turner

Ohio State University (OSU) ( email )

A264 PAES Buidling
307 Annie & John Glen Ave.
Columbus, OH OH 43210
United States
614-247-8374 (Phone)

HOME PAGE: http://go.osu.edu/bturner

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